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June 23 (Reuters) - Augusta Resource Corp said it agreed to be bought by HudBay Minerals Inc after the company raised its offer to buy Augusta shares it does not already own.
The revised offer values Augusta at about C$555 million ($511 million), HudBay said. HudBay, a base metal miner, owns about 16 percent of Augusta.
Under the offer, Augusta shareholders will receive 0.17 of a warrant to buy one HudBay share for each Augusta share in addition to the original offer of 0.315 HudBay shares per Augusta share.
The offer price of about C$3.56 per Augusta common share represents a premium of about 11 percent to Augusta's Friday close on the Toronto Stock Exchange.
The acquisition comes at a time when the price of copper has fallen by nearly a third from highs above $9,900 a tonne in February 2011. The metal was trading at about $6,875 a tonne on Monday on the London Metal Exchange.
The global copper market is expected to return to a surplus this year and next after four years of deficit as new mine supply outstrips demand.
But beyond that the market is widely expected to revert to a production shortfall as the pipeline of new supply is significantly diminished by lower prices and a shareholder-mandated austerity among the world's top miners.
The takeover underscores the continued interest in copper assets given the longer-term outlook for the industrial metal.
Last week, First Quantum Minerals Ltd agreed to buy Lumina Copper for about C$456 million in a bid to win control of Lumina's Taca Taca copper project in Argentina.
In April, a Chinese consortium acquired the Las Bambas copper mine in Peru from Glencore Xstrata for $6 billion.
HudBay said in February it planned to buy Augusta to gain control of the Rosemont project in Arizona, considered as one of the most promising copper projects in the United States.
Augusta had then urged its shareholders to reject HudBay's hostile takeover bid, terming it "grossly inadequate."
Augusta's board, which agreed to terminate a shareholder rights plan on Monday, recommended that shareholders accept the revised offer.
Augusta's shares have risen about 28 percent and HudBay is up 10 percent since HudBay first made its offer public. ($1 = 1.0853 Canadian Dollars) (Reporting by Ashutosh Pandey in Bangalore and Euan Rocha in Toronto; Editing by Saumyadeb Chakrabarty)